The British Chambers of Commerce’s Quarterly Economic Survey (QES) released today provides further evidence that the UK economy is growing at a solid pace.
The Q4 survey, made up of responses from nearly 8,000 businesses, is closely watched by the Bank of England and the Treasury. This quarter it shows improvements in most key areas for both manufacturing and services compared with Q2, and all key balances are stronger than their long-term historical averages.
Business West, as part of the British Chambers of Commerce, contributed 114 responses from businesses in Swindon and Wiltshire. Key local findings are:
This quarter’s results show a general feeling of optimism, albeit with a stabilisation in export activity.
- UK sales are showing positive results with 49% of respondents reporting an increase, 5 points up on quarter 3. UK orders have stayed relatively consistent with 38% reporting an increase (a 1 point fall on last quarter).
- Export sales and orders appear to have stabilized this quarter with 35% of respondents reporting that sales have increased, a 6 point fall on last quarter. Whilst 32% of respondents reported an increase in orders, reflecting a 5 point fall on quarter 3.
- There is a positive picture when it comes to employment with 27% of respondents reporting an increase in their current workforce, a rise of 9 points on last quarter. Forecasts are also positive with just under a quarter of respondents expecting their workforce to increase over the next 3 months. There was also a significant increase in the number of companies that have tried to recruit in the last quarter; rising from 26% to 35%.
- Competition (34%) and taxation (25%) both remain the main issues of concern to business compared to 3 months ago.
- Lack of demand (19%) and lack of management time (15%) remain the biggest barriers to growth as they have been all year. However, availability of finance and lack of skills have affected more businesses as the year has progressed, with 13% and 11% of businesses respectively reporting them as their main barrier to growth in quarter 4.
- Forecasts for the coming year look promising with 71% of respondents expecting turnover to improve (up 4 points), whilst 63% forecast an increase in profits (just one point down on quarter 3). This contributes to 70% reporting that they are confident about their prospects for the coming year, an increase of 6 points on last quarter.
Commenting on the results for our region Ian Larrard, Director of the Initiative in Swindon & Wiltshire, part of Business West, said: “It is fantastic to start the New Year with a very positive quarterly survey. Confidence is high and our members are resolute in their determination to take the recovery from being good to being truly great. Firms across the board believe they can create jobs, invest, and export. But businesses have major ambitions, and to be able to meet them, more support must be provided.
“We must give companies the finance and the skilled people to go out and trade with the world if we are to succeed in rebalancing the economy.
“As the 2015 General Election looms ever closer, the government cannot afford to get distracted by short-term political infighting or populist election give-aways. Long-term growth strategies must be delivered particularly around the infrastructure investments that we so badly need. Only then will we have an environment that fosters enterprise and an economy which meets its true potential.
“So whilst the overall message from this survey is positive, there are risks that should prevent complacency creeping in. The eurozone’s basic problems have not yet been resolved, which could adversely impact our exporters and, as trading improves, cashflow and taxation remain major concerns.”
To find out more about Business West visit: www.businesswest.co.uk